Crown Agents

Crown Agents Ltd is an international development company with head office in the United Kingdom. Its main focus is to help governments around the world to increase prosperity, reduce poverty and improve health by providing consultancy, supply chain, financial services and training.[1] In April 2016 its financial services arm (Crown Agents Bank and Crown Agents Investment Management) was sold to Helios Investment Partners, leaving Crown Agents Ltd to focus on offering expertise in the areas of "health, economic development, governance and state building, supply chain services and humanitarian response".[2]

Crown Agents Ltd
Private limited company
IndustryInternational Development
Founded1833. UK statutory public corporation, 1980–1997
21 March 1997 (Ltd.)
Headquarters
Southwark, London
,
England
Area served
Worldwide
Key people
Marie Staunton CBE
(Chair)
Fergus Drake
(CEO)
Websitewww.crownagents.com

Incorporated as a private limited company Crown Agents Ltd has only one shareholder – the Crown Agents Foundation, a not-for-profit company.[3] Crown Agents Ltd's registered office is in Southwark, London.[4]

History
The Crown CA watermark (seen here from the reverse), found on many British colonial stamps, refers to the Crown Agents

Prior to 1997, Crown Agents was a UK public statutory corporation, overseen by the British Ministry of Overseas Development.[5]

Crown Agents originated as a body conducting financial transactions for British colonies. Agents were first appointed in 1749 to transfer and account for grants made to colonies from the British Treasury.[5] These representatives were known unofficially as 'Crown agents' from at least 1758, and were accountable to colonial governments, though selected on the recommendation of the British government.[5] A single body was created in 1833, when the Crown agents' business was consolidated under two Joint Agents General for Crown Colonies with an office of several staff.[5]

The opening words of A W Abbott’s history[6] were telling in the light of events to follow. “The Crown Agents have no formal Constitution and are not part of the United Kingdom Civil Service or of the United Kingdom Government machine. The Crown Agents are simply two individuals …who have been appointed by the Secretary of State for the Colonies.</ref> This amorphous status appeared to come as a total surprise to the Government in the 1970s (see below).

In 1861 the office was renamed Crown Agents for the Colonies.[5] Crown Agents' responsibilities on behalf of colonial governments included accounting for Treasury grants, purchasing supplies, recruiting certain staff and raising capital on the markets. Crown Agents also oversaw specific colonial projects, such as certain stamp issues and some infrastructure construction.[5]

As decolonisation accelerated, the office was renamed Crown Agents for Oversea Governments and Administrations in 1954, and the rules were changed to allow it to take on projects for independent states (Iraq being the first example).[5] Crown Agents expanded its activities to include more international development projects and investment management. The world's first sovereign wealth funds were managed by Crown Agents.[7]

In 1967 the Crown Agents began to act as a principal, in addition to its traditional agency function. Heavy involvement in property speculation and secondary banking led to the financial losses of over £200m and necessitated Government support in 1974 (See “The Property Collapse below”). Its anomalous status as an autonomous body with close links to government came into question, and in 1979 Crown Agents was brought under government control as a statutory corporation. From 1987, shifting attitudes to state ownership of business and changes in British international development strategy led the government to support full privatisation of Crown Agents. It became a private company in 1997, ending its formal ties to the British government.[5]

International development work

Crown Agents is an international development company that helps countries to grow their economies, strengthen health systems and improve financial management, through consultancy, supply chain management and financial services.

Crown Agents works with clients in more than 100 countries, major multilateral agencies, such as the World Bank,[8] European Commission, United Nations agencies and bilateral donors such as DFID, KfW, SIDA, CIDA and the Danish, Japanese and U.S. governments.

It has provided governmental services as large as the Customs system of Angola,[9] transforming the central medical stores in Zambia [10] and the Value added tax (VAT) system of Lesotho. It works on sustainable development supporting more effective trade and transit corridors,[11] food security and health systems strengthening.

Projects include improving the livelihood of poor and vulnerable people in South East Asia (SEACAP) and addressing the challenges of providing reliable access for poor communities in Africa.[12] Crown Agents is active in the environmental change arena[13] and is using emerging technologies to contribute to aid effectiveness and value for money in various projects.[14] Helping governments to overcome corruption is another important development task addressed by Crown Agents, including in the collection of tax and customs revenue.[15] Crown Agents Bank is one of the UK's leading banks for disbursement of development aid.

Crown Agents is a member of the Partnership for Supply Chain Management, a partnership of thirteen private sector, non-governmental and faith-based organizations that implements the SCMS project, providing a reliable, cost-effective and secure supply of products for HIV/AIDS programs.[16]

Sectors

Crown Agents works across a large range of sectors, providing public financial management, humanitarian and crisis response, banking and investment management, procurement and logistics, food security, trade facilitation, health, IT consulting and training.

Subsidiaries

Crown Agents Ltd has subsidiaries in Africa, Asia and the US.

The Property Collapse of 1974

Background

The financial collapse of the Crown Agents, which necessitated a bail-out by the Government, was one of the most high-profile failures of the 1974 property and secondary banking crisis, and widely considered a scandal. [17] The decline in its traditional government business had led the Crown Agents “to consider ways of diversifying…and operating on their own account rather than acting as agents for others…So began a short but disastrous period in an otherwise long and distinguished service to others” [18] The move into own account trading dated back to March 1967 [19] and by the end of the 1960s, the activities of the Agents were being publicly queried by The Sunday Times and Private Eye. [17] By 1970, concerns were being raised in Parliament: Mrs. Judith Hart later referred back to her earlier comments that the “constitutional relationship between the Crown Agents and the Government, which was somewhat obscure”.[20]

The Fay Report and Tribunal

The impact of the financial and property collapse on the Crown Agents’ finances became increasingly apparent during 1974 and in October John Cuckney was appointed to sort out the problems, To meet the potential financial shortfall, the Crown Agents received an £85m grant from the Government. Recognition of the severity of the Agents’ problems. the necessity for further financial support and the political ramifications led to the establishment of the Fay Committee of Enquiry in April 1975;[21] that Committee reported on 1st December 1977. Among its detailed findings was the estimate that losses would exceed £200m.

The Fay report gives extensive detail on the Crown Agent’s activities. It was a body without effective supervision in which inexperienced officers engaged in a wide range of speculative banking and property developments on a worldwide basis. “It is manifest from the minutes of the committee that during the period from 1967 to 1974 the conduct of the affairs of the Crown Agents and. In particular, the actions of certain of its staff, lacked competence and good judgement.” [17]] The parliamentary debate on the Fay report in turn led to the establishment in March 1978 of a Tribunal "to inquire to what extent there were lapses from accepted standards of commercial or professional conduct or of public administration in relation to the operations of the Crown Agents as financiers on own account in the years 1967-1974. The Tribunal findings were submitted in March 1982. In a formal statement to the House of Commons, the Prime Minister reported that “the tribunal has identified a number of serious shortcomings that existed at that time, not only in relation to the conduct of individuals, in respect of some of whom lapses or criticisms falling short of lapses were formally specified, but also in relation to the operation of institutions and procedures.”[22]

The Investments

The best-known of the Crown Agents’ investments was with the William Stern group; Stern himself became Britain’s largest ever bankrupt to date and the losses of the Crown Agents were reported to be £54m.[23] Less well-known but also a substantial problem were the Australian property investments held under the umbrella of English and Continental Group, where losses were estimated as a possible £35m. [17]] There was also a commitment to a wide range of secondary banks. Margaret Reid regarded the Crown Agents’ support for them as “much the biggest and widely discussed amount of finance for the Bank of England’s Lifeboat support operation”. Institutions singled out included Triumph Investment Trust, Sterling Industrial Trust and Burston Group.[24]

Recovery

The appointment of John Cuckney in October 1974 was the first step in rescuing the Crown Agents and restoring confidence in its traditional functions. He instituted a programme of controlled disposals, realizing what he could from the property and banking investments. Probably the most intransigent were the Australian property investments which took some years to bring under the Agents full control. One of the most important organizational decisions made by Cuckney was in March 1977, concerning the Agents’ subsidiary, Millbank Technical Services. Millbank had been established in 1967 to offer services “outside their traditional agency role.”: in effect, it had become a substantial exporter of military equipment. Millbank was transferred to the Ministry of Defence, thereby returning the Agents to its traditional activity.[25] However, uncertainty continued over the legal status of the Crown Agents and it was not until the Crown Agents Act 1979 that the legal and constitutional position was regularized. The Act established the Agents as a corporate body under formal name of Crown Agents for Oversea Governments and Administrations.[26]

Sources

There are extensive sources on this period of the Crown Agents history: government, books and contemporary media. The most authoritative sources are the Fay Report and the subsequent Tribunal. These are held in The National Archives but they have not been digitized and are not therefore available online. However, there is a valuable briefing paper prepared by the Lord Chancellor for the Cabinet prior to the publication of the Fay Report. In addition, there are several ministerial statements available through Hansard. There are numerous books written about the secondary banking crisis and its participants, of which Margaret Reid’s is the best-known. David Sunderland’s book on the Crown Agents has three chapters (8-10) on this period.

The Crown Agents Foundation

Crown Agents is owned by "The Crown Agents Foundation", a company limited by guarantee, whose objectives include the alleviation of worldwide poverty. Crown Agents allocates sums from its income to the Foundation's social and developmental objectives and applies these at the Foundation's direction.

Members of the foundation are organisations with a keen interest in international development and include firms, non-governmental organisations and international bodies.

These include: British Expertise, The Aga Khan Foundation, The Chartered Institute of Building, The Chartered Institute of Purchasing & Supply, Christian Aid, Charities Aid Foundation, African Medical and Research Foundation, British Council, CARE (relief agency), Commonwealth Business Council, Concern Worldwide, CIBC FirstCaribbean International Bank, Practical Action, International Business Leaders Forum, International Chamber of Commerce, Transparency International and The Royal Commonwealth Society. The British Department for International Development is represented among the Foundation's members.

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References
  1. Crown Agents website
  2. "Press Release". Crown Agents. Retrieved 22 July 2016.
  3. Group structure shown at Duedil
  4. "Companies House Webcheck". Archived from the original on 29 December 2008. Retrieved 20 March 2013.
  5. "Crown Agents – Our History". Retrieved 17 December 2016.
  6. A W Abbott, A Short History of the Crown Agents and their Office, (1959)
  7. "Our History". Crown Agents Bank. Retrieved 22 July 2016.
  8. Crown Agents Newsletter Managing Debt (World Bank website)
  9. Customs reform and modernisation in Angola (Kenya Revenue Authority website)
  10. MSL website Archived 2010-02-16 at the Wayback Machine
  11. Linking Dar to Durban (This is Africa, FT magazine Archived 2011-07-17 at the Wayback Machine)
  12. AFCAP
  13. Crown Agents to install Japan-funded $8.6m solar plant in Uruguay
  14. Crown Agents ensuring safety and speed with mobile money transfer technology
  15. Honesty for Hire (Hoover Institute) Archived 2011-07-26 at the Wayback Machine
  16. "SCMS website". Archived from the original on 2013-10-05. Retrieved 2013-10-04.
  17. Lord Chancellor Memorandum to Cabinet Crown Agents The Fay Report. 7th November 1977 National Archives CAB 129/198/12 https://discovery.nationalarchives.gov.uk/details/r/C9948482
  18. Ireton, Barrie: Britain's International Development Policies: A History of DFID and Overseas Aid, (2013), Palgrave
  19. Sunderland, David, Managing British Colonial and Post-Colonial Development: The Crown Agents, 1914-1974 (2007) Boydell & Brewer, ISBN 9781843833017
  20. The Minister of Overseas Development (Mrs. Judith Hart), 18 Dec 1974, Hansard
  21. Crown Agents: The Fay Committee of Inquiry; publication of the Fay Report, National Archives, reference OD 71/48
  22. The Prime Minister, 26 May 1982 Hansard
  23. "William Stern, property developer and financier – obituary". Daily Telegraph obituary. 30 March 2020.
  24. Reid, Margaret: The Secondary Banking Crisis, 1973-75,(1982), Macmillan
  25. Hansard 29 March 1977 https://hansard.parliament.uk/commons/1977-03-29/debates/1373633a-4555-4fb1-befa-7a7b726dae67/MillbankTechnicalServices
  26. Crown Agents Act 1979, https://www.legislation.gov.uk/ukpga/1979/43/contents

Sources
  • Sunderland, David (2004). Managing the British Empire: The Crown Agents, 1833–1914. Boydell. ISBN 0-86193-267-6.
  • Sunderland, David (2007). Managing British Colonial and Post-Colonial Development: The Crown Agents, 1914-1974. Boydell. ISBN 1-84383-301-8.
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